Ukraine’s $3 billion debt to Russia could undermine the IMF’s four-year multibillion dollar bailout program. If the debt is considered official, it will breach the terms of providing financial assistance, said IMF spokesperson William Murray.

The Ukraine debt includes $3 billion in Eurobonds lent by Russia
to the country’s previous government in December 2013. IMF rules
say a bailout cannot be provided to a country if it defaulted on
a loan from a state institution.

"We have a non-tolerance policy," William Murray told
reporters at a news conference on Thursday, adding that Ukraine's
debt to Russia should be considered state debt.

"If I'm not mistaken, the $3 billion Eurobond comes from the
Russian sovereign wealth fund, so it's official debt," he
said.

Earlier in March the IMF approved a $17.5 billion loan to Ukraine
as part of the four-year bailout program in exchange for the
economic, budget and monetary reforms. The country has received
an initial $5 billion payment.

The fund has repeatedly warned that violations of the ceasefire
in Ukraine’s south-east, along with its failure to reschedule the
debt to private lenders could also pose a substantial risk to the
implementation of the bailout program.

There are two possible ways Ukraine can save the situation with
its debt – either to renegotiate the Russian loan through the
Paris club of creditor nations, or sell it on the secondary
market, so that it would no longer be owed to Russia.